As vacation gap widens, lodging industry adapts at luxe and low ends

A dream vacation for some, reality for others. A dream vacation for some, reality for others. A butler at the St. Regis hotel in Abu Dhabi, United Arab Emirates, prepares to welcome guests to a two-story suite with a nightly rate of $21,500. It has three bedrooms, a spa, a cinema, a bar, two kitchens and a 360-degree panoramic view of the city. Photo Credit: AP / Kamran Jebreili

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Private elevators, personal shopping assistants, six-bedroom suites -- even helipads. This is what the super-rich have come to expect from hotels.

For others, vacation now means renting someone's apartment, a spare room, maybe just a couch -- anything to save on the cost of a hotel.

As the gap between the wealthiest travelers and everyone else has widened, so has the way people are experiencing vacations. The wealthy are looking for ever more pampering. Many others are seeking new ways to economize.

And the lodging industry is adapting -- at the high and low ends -- to meet the diverging needs.

Luxury hotels are catering to financial elites from Russia, China, Brazil or the Middle East who now routinely hop around the world and don't mind dropping $20,000 a night for a glamorous accommodation.

"High-end travel in the air, on the sea and on land has never been more robust," says Steve Carvell, an associate dean at Cornell University's School of Hotel Administration. "There are more people with more concentrated wealth."

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Luxury hotels are arising even at iconic middle-American tourism spots such as Walt Disney World in Orlando, Florida. Four Seasons will open a 444-room resort there in August with 68 suites, including a nine-bedroom royal suite sporting a 1,000-square-foot private terrace with views of the park's nightly fireworks.

With the recently opened St. Regis Abu Dhabi in the United Arab Emirates, architects considered how much privacy to provide its most sumptuous suites, says Paul James, head of Starwood Hotels and Resorts' luxury properties.

"Part of the Abu Dhabi conversation was: 'Where does the helicopter land?'" James says.

The return of extravagance reflects one characteristic of the economic recovery: After paring their vacations along with everyone else during the recession, the wealthy have rebounded with force. Since 2009, hotel spending by the wealthiest 20 percent of Americans has risen about 6 percent, according to inflation-adjusted data from the Bureau of Labor Statistics. The middle 20 percent are still spending nearly 3 percent less.

To stretch their discretionary dollars, middle-income vacationers are fueling one of the industry's growth areas: "limited service" lodgings. At Marriott's Fairfield Inn, Hyatt Place and Holiday Inn Express, you get free Wi-Fi and breakfast. But there's no bellman, concierge or restaurants.

Many people are seeking deeper savings through increasingly popular sites such as Airbnb that arrange for people to rent rooms or apartments. The number of listed accommodations has soared since Airbnb's founding in 2008 to 550,000 -- not far below Hilton's 685,000 rooms worldwide. Some studies suggest that Airbnb could be cutting into budget hotels' revenue.

Robin Lynch, 34, of New York City put 14 relatives, including her in-laws, in five Airbnb facilities in Brooklyn for her wedding last year. She estimates she paid an average of $200 a night, compared with the $300 she'd expected for a hotel.

"That amounts to a lot of savings over seven days," she says.

High unemployment and flat paychecks have spurred more people not only to stay in Airbnb rooms but also to list their own homes. Airbnb hosts typically don't pay accommodation taxes or meet safety or disability regulations. That's sparked grumbling from hotels -- and from localities that lose out on tax revenue.

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